Daniel Hannan MEP Reviews the State of Conservatism and Debt in Europe

One of the most passionate and well-received speeches at CPAC was not delivered by an American. It was delivered by a proud Brit to barrages of applause. It was a speech that centered on our founding documents, our common heritage, and our potentially disastrous future if the present paths toward bigger government are not abandoned.

[youtube 6U6v0pZ9f6k]

This may come as a bit of a shock to many American conservatives, but there is a healthy and robust conservative movement underway in Europe, and Daniel Hannan, MEP from South East England, has become an important voice in this movement. I had the pleasure of spending some time with Mr. Hannan discussing European conservatism and the debt crisis enveloping the Eurozone.

Dr. Whitman: Hello Mr. Hanna, I am Jason Whitman, National Republican Policy Chairman for the Young Republican National Federation. It is an honor to meet you.

Mr. Hannan MEP: We are looking forward to working with you and your organization. As you know, the American Republican is not a particularly popular creature in Europe right now, and we would like to help you with that.

Dr. Whitman: We look forward to working jointly with you on our common goals. As American conservatives, we see a society in the UK that is seemingly being brought to its knees by failed Leftist policies. What are UK conservatives doing to overcome that, and how successful has it been?

Mr. Hannan MEP : We’ve got two outstanding problems in the UK. We’ve got the immediate problem of the massive debt and that creates social problems. It is much easier in times of rising prosperity to make the kinds of reforms you need. In the 1990’s, when the Gingrich welfare reforms were brought in, they were brilliantly successful on every metric. Bills fell, poverty fell, everybody was happy, but it happened at a time of rising prosperity which is not the luxury we have now.

The deeper problem we have is a problem of legitimacy, that politicians have lost a lot of authority. The reason for that is because of a broad, wide-spread sense that it doesn’t really matter how you vote because nothing is going to change, and that is not an unjustified conclusion. The truth is, that a lot of power has shifted from elected people to unelected people, both domestically and at the European Union level. The ballot box really has been drained of power, and until we restore honor and purpose to the act of voting, we’re going to have a problem of political legitimacy.

Dr. Whitman: Where does the UK fit in with the European Union at this point?

Mr. Hannan MEP: If there was a referendum tomorrow, we would vote to leave. There is no question about it, the matter has been a settled, steady position in the opinion polls since the late 1990’s. I can’t remember the last time where we had a poll stating that staying in the EU was even close. That’s part of the problem. When I was talking about the problem of political legitimacy, this is a lot of the component of it. All of the politicians are pursuing a policy that the majority of the country doesn’t want. All three major parties were recently promising a vote on Europe, and all three reneged. Having identified the problem, it is a remedial problem. If we did what we promised, we would immediately solve the problem!

Dr. Whitman: Let’s shift our focus to some of the financial problems in the Eurozone, specifically Greece and their resistance to the new austerity measures being proposed. As you know, in the US, when we look at our fiscal crisis, we often analogize our situation to that in Greece. What is the UK’s position on this issue? Does the UK wield any power in moving this looming catastrophe in the right direction?

Mr. Hannan MEP: In Greece, or any country with a debt level as large as Greece’s, it has a problem, and there are no easy solutions to that problem. However, the EU is playing a bad hand with spectacular incompetence. They are doing the one thing that is guaranteed to puff up any chance of revival in this, and that is to keep it in the Euro, keep it with an over-valued currency, and prevent them from exporting their way back to prosperity. In order to keep it in the currency, they are having to subsidize it, so everybody loses. The Greeks are suffering poverty and unemployment, the Germans and the Fins etc. are suffering under higher taxes.

Dr. Whitman: I am a currency trader by profession, and when we look at the Euro we see a currency that is certainly over-valued based on its fundamentals. If you had to speculate about the future of the Euro, what would you predict will be its fate?

Mr. Hannan MEP: If I were a forecaster, I would guess the Euro will carry on in something resembling its current configuration. Greece may or may not leave, but in terms of a general unbundling, I don’t see anything like that happening in the short term. It should, I mean there is no question it would be in the interest of everybody to have that happen. Never underestimate the ability of the European Commission to choose the worst possible option.

Dr. Whitman: It seems they are already demonstrating that ability.

Mr. Hannan MEP: Look, Greece has already defaulted on half its debt and it is probable in the coming weeks it will default on the rest of its debt. There is an almost universal assumption that its defaulting on the rest would mean it would have to leave the Euro. I mean, taking the hit of a default without the gain of a devaluation is the worst of all worlds, but that doesn’t mean it’s not going to happen.

Dr. Whitman: I would argue it is highly likely to happen.

Mr. Hannan MEP: For them [Greece] to default and stay in the Euro is a disaster for everybody, but I think that, on balance, that is still the most likely scenario. I am slightly less confident about it than I was about it a few weeks ago because I think there is a real impatience about it in some of the other countries. I still think it is the most likely scenario, I mean nobody in Greece is even contemplating leaving the Euro. At some stage in 2012, their economy will move into a primary circus. You know, the single biggest component of their deficit is interest payments. That makes the default completely feasible.

Unfortunately, our interview was cut short by a deluge of media, but Mr. Hannan was completely able to provide a realistic picture of where the Eurozone and its currency may be headed. I was encouraged by his assessment that conservatism is on the rise in Europe, a fact confirmed during the time I spent with leaders of the European Young Conservatives group at CPAC.

It is of utmost importance that we learn from the failures of Europe, while at the same time, offering our complete support to the conservatives in the Eurozone. They are trying desperately to govern from a conservative platform position, a lonely proposition indeed.

Additional Resources:

Daniel Hannan MEP has a blog located here. I cannot recommend highly enough that you add it to your regular reading list.

If you were unfortunate enough to miss his CPAC 2012 speech, The Right Scoop has the full video. If you don’t watch anything else from CPAC, watch this speech.